Corporate Social Responsibility

CSR reporting

The last decade has seen a massive increase in the number of businesses providing non-financial reports, also
known as CSR reports, corporate responsibility reports or sustainability reports. During 2005, ACCA
estimates that between 1500 and 2000 companies worldwide produced such a report. In 2006, 85 per cent of the
FTSE 100 produced a non-financial report; while KPMG report that half of the US Fortune 250 have issued
separate sustainability reports.

A range of sectors publish CSR reports, from chemicals, retailing, water, utilities, oil and gas, media,
transport, steel and other metals to government authorities, and the number of sectors is growing. With the
emergence of CSR, ‘pure’ environmental reports have been merged into larger, broader reports. A
useful source of free information and advice on the growth of CSR reports and downloadable copies of such
reports can be accessed at www.corporateregister.com.

CSR reporting tools and standards

For a business that wants to produce a CSR report, there is a range of tools and standards (see below) that
can help whoever is responsible formulate key performance indicators, define the importance and significance
of aspects of the report and engage with key stakeholders.

Global Reporting Initiative (GRI)

This is a set of voluntary guidelines that
organisations can use to report on the economic, environmental and social dimensions of their activities,
products and services.

SA8000

A voluntary, universal standard for companies interested in
auditing and certifying labour practices in their facilities and those of their suppliers. It is designed
for third party verification.

AA1000

An accountability
standard designed to improve accountability and performance by learning through stakeholder engagement.

ISO26000 Corporate Responsibility Guidance

The proposed ISO 26000 standard is scheduled for publication in September 2010. The planned
guidance document on social responsibility will not include requirements, so therefore will not be a
certification standard.

More information, including newsletters, development timeframe, FAQs and contacts can be found
at www.iso.org./sr.

Data for inclusion

For businesses that want to produce a CSR report (or sustainability report), the inclusion of social, ethical
and environmental key performance indicators is fundamental. Often, businesses will have ready access to
data which can be included in such reports:

Water billing information, including consumption per year

Electricity and gas billing, including consumption per year

Waste-to-landfill data from waste transfer notes.

Transport business mileage data, which can be obtained from fuel bills and litres consumed

Information relating to employees, such as numbers of male and female managers and administration
roles

Numbers of reportable accidents

Customer information, which can be obtained from formal complaints records

Supply chain data, which can be gleaned from invoice payments and tender documentation (for example, the
number of suppliers with environmental policies).

Should the report wish to disclose the business’ direct carbon footprint from operations and transport
activities, then the application of conversion factors to both gas/electricity billing and transport
mileage/fuel consumed will provide a total CO2 figure in tonnes. The source of conversion factors for CO2
emissions can be found at the Vehicle Certification Agency and Defra, as well as the global
reporting initiative.

The chosen key performance indicators for CSR reporting ideally should reflect the business’s own code
of conduct and, if possible, link to recognised indices, such as GRI. Where the business chooses to follow a
standard, such as AA1000, then the key performance indicators should reflect and align with these
principles.

CSR reporting and assurance

For businesses that produce a CSR report, the use of independent assurance helps to build trust with
stakeholders. Assurance provides an independent opinion on internal systems, thus building transparency and
accountability. Ultimately, independent assurance helps to manage business risks, provide recommendations
for improvement, support internal decision making and verify that information in the report is accurate.
Stakeholders will view a report that has not been independently assured less favourably then one that
has.